XRP’s 44% rally brings leverage back, raising risk of sharper pullback
XRP has experienced a significant price rally, leading to a seven-month high in leverage ratios on major exchanges. Analysts warn that this high level of leveraged long positions increases the risk of a sharp market correction if prices drop.
Why it matters
High leverage in crypto markets often precedes volatile liquidations, which can destabilize asset prices and impact retail investors.
Data from onchain analysis firm CryptoQuant's estimated leverage ratio for XRP on Binance has climbed to about 0.21, its highest since January. The measure compares derivatives open interest with exchange reserves, with higher readings showing more leveraged exposure building relative to the amount of XRP sitting on the venue.
The article relies on market data and analyst observations to describe current trading conditions.
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